NOT PRECEDENTIAL
UNITED STATES COURT OF APPEALS FOR THE THIRD CIRCUIT ________________
No. 19-2229 ________________
DAMIAN A. GREGORY; SHAYLA A. GREGORY,
Appellants
v.
COMMISSIONER OF INTERNAL REVENUE ________________
On Appeal from the United States Tax Court (IRS No. 17-01465) Tax Court Judge: Ronald L. Buch ________________
Argued on April 16, 2020 Before: CHAGARES, SCIRICA and ROTH, Circuit Judges
(Opinion filed: December 30, 2020)
T. Keith Fogg (ARGUED) Audrey Patten Oliver Roberts (ARGUED) Legal Services Center of Harvard Law School 122 Boylston Street Jamaica Plain, MA 02130
Carlton M. Smith 255 West 23rd Street #4AW New York, NY 10011
Counsel for Appellant Janet A. Bradley Thomas J. Clark (ARGUED) United States Department of Justice Tax Division 950 Pennsylvania Avenue, N.W. P.O. Box 502 Washington, DC 20044
Counsel for Appellee
________________
OPINION* ________________
ROTH, Circuit Judge
Damian and Shayla Gregory appeal the Tax Court’s determination that the IRS
properly sent a notice of deficiency to their last known address. In 2016, the IRS sent a
notice of deficiency to the Gregorys’ former address, which their CPA had incorrectly
listed on their 2014 tax return. The Gregorys had subsequently listed their new address
on IRS forms although not on an official IRS change of address form. As a result of the
deficiency notice going to the former address, the Gregorys’ petition to the Tax Court for
review of the deficiencies was late. The Tax Court found that the IRS had correctly
determined the Gregorys’ last known address. This determination deprived the Tax
Court of jurisdiction over the Gregorys’ untimely petition. The Gregorys appealed.
Because of the unique facts of this case, we will vacate the judgment of the Tax Court.
* This disposition is not an opinion of the full Court and pursuant to I.O.P. 5.7 does not constitute binding precedent.
2 I. FACTS
When Damian and Shayla Gregory moved in June 2015, they neglected to submit
an official change of address form to the IRS or to the Postal Service. Compounding the
error, their CPA, Michael Chaffee, listed their old address when he filed their 2014 tax
return in October 2015.1 By November 2015, the IRS was auditing the Gregorys’ 2013
return.
Chaffee sent Form 2848 to the IRS agent conducting the audit, designating himself
as Power of Attorney for the Gregorys. The Form 2848 listed the Gregorys’ new address.
Form 2848 states that its only purpose is for “representation before the IRS.”2 The
instructions for Form 2848 state that the address listed on the form will not change the
taxpayer’s last known address and directs the taxpayer to file Form 8822 to change their
address with the IRS.
In April 2016, Chaffee filed IRS Form 4868 to extend the Gregorys’ time to file
their 2015 tax return. Form 4868 also listed the Gregorys’ new address, but, like Form
2848, its instructions told the taxpayer to use Form 8822 to change their address with the
IRS. Three days after Chaffee filed the extension, the IRS agent conducting the 2013
audit mailed a letter to the Gregorys’ old address, informing them that their 2014 taxes
1 The Gregorys had received an extension to file their 2014 return. 2 App. 138. 3 were also being audited.3 Sometime in the summer of 2016, Chaffee told the IRS agent
Buzzelli during a telephone call that the Gregorys had moved.
In October 2016, the IRS mailed to the Gregorys, at their old address, a statutory
notice of deficiency (SNOD) for their 2013 and 2014 taxes. The notice gave the
Gregorys ninety days to petition for review in the Tax Court. After the ninety-day period
had ended, Chaffee called the IRS to learn whether the IRS had issued the Gregorys a
SNOD, and the IRS confirmed that it had. Chaffee and the Gregorys then mailed a
petition to the Tax Court.
In the Tax Court, the IRS moved to dismiss the petition for lack of jurisdiction as
untimely. The Gregorys cross-moved to dismiss the SNOD for lack of jurisdiction
because it was not sent to their last known address. The Tax Court granted the IRS’s
motion because the Gregorys’ petition to the Tax Court was late and the Gregorys’ last
known address was their old address. The Gregorys appealed.
3 The IRS agent later reached out to Chaffee requesting more information about the Gregorys’ 2013 and 2014 returns, and there is no allegation that the Gregorys did not know about the 2014 audit. 4 II. DISCUSSION4
The IRS must send statutory notices of deficiency to a taxpayer’s “last known
address.”5 “[A] taxpayer’s last known address is the address that appears on the
taxpayer’s most recently filed and properly processed Federal tax return, unless the [IRS]
is given clear and concise notification of a different address.”6 IRS regulations provide
that IRS procedures will define “clear and concise notification.”7 The procedure in place
at the time of the Gregorys’ proceedings, Revenue Procedure 2010-16, excludes
“applications for extension of time to file a return or powers of attorney” from the
definition of tax return.8 To be “clear and concise,” written notice requires “a written
statement signed by the taxpayer” that is mailed to the IRS and includes “the new
address, . . . the taxpayer’s full name and old address as well as the taxpayer’s social
security number, individual taxpayer identification number, or employer identification
number.”9
4 We have jurisdiction of this appeal under 26 U.S.C. § 7482(a)(1). “We review the Tax Court’s legal conclusions de novo and its factual findings for clear error.” Anderson v. Comm’r, 698 F.3d 160, 164 (3d Cir. 2012) (citing Capital Blue Cross v. Comm’r, 431 F.3d 117, 123–24 (3d Cir. 2005)). The Tax Court’s determination as “to the last known address” is an issue of fact that we review for clear error. See Berger v. Comm’r, 404 F.2d 668, 672 (3d Cir. 1968); see also Terrell v. Comm’r, 625 F.3d 254, 259 (5th Cir. 2010); Gaw v. Comm’r, 45 F.3d 461, 465 (D.C. Cir. 1995); Johnson v. Comm’r, 611 F.2d 1015, 1019 (5th Cir. 1980). 5 I.R.C. § 6212(b). 6 Treas. Reg. § 301.6212-2(a). 7 Id. 8 Rev. Proc. 2010-16 § 5.01(4). 9 Rev. Proc. 2010-16 § 5.04 (1)(a). The Revenue Procedure also provides requirements for oral and electronic notice, but those are not at issue. 5 In addition to these IRS instructions, courts have required the IRS to use
“reasonable diligence” to determine a taxpayer’s last known address.10 This reasonable
diligence requirement “is rooted in equity.”11 Reasonable diligence is measured by what
“the IRS knew or should have known at the time it sent the [n]otice” of deficiency,12
including information it should know “through the use of its computer system.”13
The Gregorys argue that their power of attorney forms and extension request
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NOT PRECEDENTIAL
UNITED STATES COURT OF APPEALS FOR THE THIRD CIRCUIT ________________
No. 19-2229 ________________
DAMIAN A. GREGORY; SHAYLA A. GREGORY,
Appellants
v.
COMMISSIONER OF INTERNAL REVENUE ________________
On Appeal from the United States Tax Court (IRS No. 17-01465) Tax Court Judge: Ronald L. Buch ________________
Argued on April 16, 2020 Before: CHAGARES, SCIRICA and ROTH, Circuit Judges
(Opinion filed: December 30, 2020)
T. Keith Fogg (ARGUED) Audrey Patten Oliver Roberts (ARGUED) Legal Services Center of Harvard Law School 122 Boylston Street Jamaica Plain, MA 02130
Carlton M. Smith 255 West 23rd Street #4AW New York, NY 10011
Counsel for Appellant Janet A. Bradley Thomas J. Clark (ARGUED) United States Department of Justice Tax Division 950 Pennsylvania Avenue, N.W. P.O. Box 502 Washington, DC 20044
Counsel for Appellee
________________
OPINION* ________________
ROTH, Circuit Judge
Damian and Shayla Gregory appeal the Tax Court’s determination that the IRS
properly sent a notice of deficiency to their last known address. In 2016, the IRS sent a
notice of deficiency to the Gregorys’ former address, which their CPA had incorrectly
listed on their 2014 tax return. The Gregorys had subsequently listed their new address
on IRS forms although not on an official IRS change of address form. As a result of the
deficiency notice going to the former address, the Gregorys’ petition to the Tax Court for
review of the deficiencies was late. The Tax Court found that the IRS had correctly
determined the Gregorys’ last known address. This determination deprived the Tax
Court of jurisdiction over the Gregorys’ untimely petition. The Gregorys appealed.
Because of the unique facts of this case, we will vacate the judgment of the Tax Court.
* This disposition is not an opinion of the full Court and pursuant to I.O.P. 5.7 does not constitute binding precedent.
2 I. FACTS
When Damian and Shayla Gregory moved in June 2015, they neglected to submit
an official change of address form to the IRS or to the Postal Service. Compounding the
error, their CPA, Michael Chaffee, listed their old address when he filed their 2014 tax
return in October 2015.1 By November 2015, the IRS was auditing the Gregorys’ 2013
return.
Chaffee sent Form 2848 to the IRS agent conducting the audit, designating himself
as Power of Attorney for the Gregorys. The Form 2848 listed the Gregorys’ new address.
Form 2848 states that its only purpose is for “representation before the IRS.”2 The
instructions for Form 2848 state that the address listed on the form will not change the
taxpayer’s last known address and directs the taxpayer to file Form 8822 to change their
address with the IRS.
In April 2016, Chaffee filed IRS Form 4868 to extend the Gregorys’ time to file
their 2015 tax return. Form 4868 also listed the Gregorys’ new address, but, like Form
2848, its instructions told the taxpayer to use Form 8822 to change their address with the
IRS. Three days after Chaffee filed the extension, the IRS agent conducting the 2013
audit mailed a letter to the Gregorys’ old address, informing them that their 2014 taxes
1 The Gregorys had received an extension to file their 2014 return. 2 App. 138. 3 were also being audited.3 Sometime in the summer of 2016, Chaffee told the IRS agent
Buzzelli during a telephone call that the Gregorys had moved.
In October 2016, the IRS mailed to the Gregorys, at their old address, a statutory
notice of deficiency (SNOD) for their 2013 and 2014 taxes. The notice gave the
Gregorys ninety days to petition for review in the Tax Court. After the ninety-day period
had ended, Chaffee called the IRS to learn whether the IRS had issued the Gregorys a
SNOD, and the IRS confirmed that it had. Chaffee and the Gregorys then mailed a
petition to the Tax Court.
In the Tax Court, the IRS moved to dismiss the petition for lack of jurisdiction as
untimely. The Gregorys cross-moved to dismiss the SNOD for lack of jurisdiction
because it was not sent to their last known address. The Tax Court granted the IRS’s
motion because the Gregorys’ petition to the Tax Court was late and the Gregorys’ last
known address was their old address. The Gregorys appealed.
3 The IRS agent later reached out to Chaffee requesting more information about the Gregorys’ 2013 and 2014 returns, and there is no allegation that the Gregorys did not know about the 2014 audit. 4 II. DISCUSSION4
The IRS must send statutory notices of deficiency to a taxpayer’s “last known
address.”5 “[A] taxpayer’s last known address is the address that appears on the
taxpayer’s most recently filed and properly processed Federal tax return, unless the [IRS]
is given clear and concise notification of a different address.”6 IRS regulations provide
that IRS procedures will define “clear and concise notification.”7 The procedure in place
at the time of the Gregorys’ proceedings, Revenue Procedure 2010-16, excludes
“applications for extension of time to file a return or powers of attorney” from the
definition of tax return.8 To be “clear and concise,” written notice requires “a written
statement signed by the taxpayer” that is mailed to the IRS and includes “the new
address, . . . the taxpayer’s full name and old address as well as the taxpayer’s social
security number, individual taxpayer identification number, or employer identification
number.”9
4 We have jurisdiction of this appeal under 26 U.S.C. § 7482(a)(1). “We review the Tax Court’s legal conclusions de novo and its factual findings for clear error.” Anderson v. Comm’r, 698 F.3d 160, 164 (3d Cir. 2012) (citing Capital Blue Cross v. Comm’r, 431 F.3d 117, 123–24 (3d Cir. 2005)). The Tax Court’s determination as “to the last known address” is an issue of fact that we review for clear error. See Berger v. Comm’r, 404 F.2d 668, 672 (3d Cir. 1968); see also Terrell v. Comm’r, 625 F.3d 254, 259 (5th Cir. 2010); Gaw v. Comm’r, 45 F.3d 461, 465 (D.C. Cir. 1995); Johnson v. Comm’r, 611 F.2d 1015, 1019 (5th Cir. 1980). 5 I.R.C. § 6212(b). 6 Treas. Reg. § 301.6212-2(a). 7 Id. 8 Rev. Proc. 2010-16 § 5.01(4). 9 Rev. Proc. 2010-16 § 5.04 (1)(a). The Revenue Procedure also provides requirements for oral and electronic notice, but those are not at issue. 5 In addition to these IRS instructions, courts have required the IRS to use
“reasonable diligence” to determine a taxpayer’s last known address.10 This reasonable
diligence requirement “is rooted in equity.”11 Reasonable diligence is measured by what
“the IRS knew or should have known at the time it sent the [n]otice” of deficiency,12
including information it should know “through the use of its computer system.”13
The Gregorys argue that their power of attorney forms and extension request
constitute clear and concise notice of a new address and that the IRS’s interpretation to
the contrary is unreasonable and not entitled to deference. They also point out that the
Gregorys’ CPA was in direct contact with IRS Agent Buzzelli and he informed her of the
change of address. The IRS argues that it has given taxpayers clear guidance on how to
change their address that the Gregorys failed to follow.
We do not doubt the wisdom of a bright-line rule for how to notify the IRS of an
address change or the IRS’s authority to make such a rule. However, Form 8822 has not
been consistently required to notify the IRS of an address change. For example, Revenue
Procedure 01-18, the procedure in place before Revenue Procedure 2010-16, included
many of the same requirements for written notice as Revenue Procedure 2010-16.14
Although it did not mention Form 2848, it stated that Form 4868 was not a “return” and
would “not be used . . . to update the taxpayer’s address of record.” While this prior
10 See Gyorgy v. Comm’r, 779 F.3d 466, 478 (7th Cir. 2015); Terrell, 625 F.3d at 259. 11 Gyorgy, 779 F.3d at 479 (citing Gaw, 45 F.3d at 468 (D.C. Cir. 1995)). 12 Terrell, 625 F.3d at 260. 13 Abeles v. Comm’r, 91 T.C. 1019, 1035 (1988). 14 Rev. Proc. 2001-18 § 5.04 (1) (requiring written notice to include the new address, “the taxpayer’s full name, signature, old address, and social security number”). 6 Revenue Procedure was in effect, updated addresses on Form 2848 were at least twice
found to be sufficient notice of an address change.15
Furthermore, the IRS had actual notice that the Gregorys had moved. Besides the
power of attorney forms and extension request, Chaffee testified that in the summer of
2016—before the IRS issued the SNODs—he told the IRS agent conducting the audit
that the Gregorys had moved. In determining whether the IRS had clear and concise
notice of an address change, the proper inquiry is what the IRS knew or should have
known.16 We conclude that actual notice to the IRS agent combined with an updated
address on two forms is sufficient notice that the IRS knew or should have known that the
Gregorys had changed addresses. The Tax Court erred in finding otherwise.
III. CONCLUSION
In view of the facts of this case, we will vacate the Tax Court’s judgment and
remand for further proceedings, consistent with this opinion.
15 Hunter v. Comm’r, T.C. Memo 2004-81, at *4 (Mar. 23, 2004). A few years later, the Tax Court in Downing v. Comm’r, T.C. Memo 2007-291 at *7 (Sept. 24, 2007) similarly found Form 2848 provided clear and concise notification of an address change. 16 Terrell, 625 F.3d at 260. 7